Recent Articles

The Definition of Fixed Assets

Any tangible item not consumed within one accounting cycle (typically a year) and providing long term utility is referred to as a Fixed Asset. Traditional images include manufacturing equipment, tools, transportation vehicles, buildings and utility related systems (sewage systems, power grids, power plants and dams). In accounting, these assets are recorded to the balance sheet as ‘Fixed Assets’.

Tangible and Intangible – Business Definitions and Use

11/03/2014

Tangible and intangible are terms with several different meanings.  A lot of well educated folks have a difficult time providing an all inclusive definition.  Someone once described tangible as ‘something that can be burned’.  Well, land is [...]

Book Value – Definition and Usage

05/15/2014

There are several definitions associated with the term ‘Book Value’ and depending on the context of its use, determines the correct definition and proper use.  The three primary uses of the term are as follows: Stock, Corporate Value or Balance [...]

Lease or Buy

02/11/2014

Fixed assets are normal in business operations.  However, financing those assets is the critical issue.  If you buy the asset outright, you tie up capital that can be used to expand operations or keep overall costs low in operating the company.  [...]

Capital Expenditures – IRS Definition

01/21/2014

The Internal Revenue Service uses a complex definition to identify capital expenditures (assets).  A capital expenditure is not deductible as an expense in the tax year purchased; the taxpayer or entity must use depreciation, amortization or [...]

The Fixed Assets Section of the Balance Sheet

09/24/2013

The fixed assets section of the balance sheet is one of the easiest sections to read and understand.  This article is written to describe and illustrate some simple examples of the fixed assets section.  I am not teaching the reader about the [...]

Small Business Model Series Entry #4 – Basic Research

01/16/2013

Research is something I hate.  I don’t know which is worse, a dental visit or doing research.  This is why I didn’t go to college.  But, I know; I want to protect my hard earned dollars and I need to get smart about Automated Teller [...]

Liquidity – What Does This Mean?

01/12/2013

In business, liquidity is defined as the period of time it takes to turn assets into cash.  It takes 20 minutes to turn the balance in the checking account into cash.  You head on down to the bank and present a check.  You get cash.  But most [...]

Small Business Tax Depreciation – Section 179

12/23/2012

The Internal Revenue Service sets the depreciation allowance based on the Code as promulgated by Congress.  The most commonly referenced section is 179.  This is a form of accelerated depreciation allowing the small business owner the opportunity [...]